Economics · Oct / Nov 2023 · Paper 22 · Question 5
0455
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The question as text
In 2020, Singapore experienced a decrease in both its population size and its labour force. 2020 was a year of great change in a number of Singaporean markets. Some moved from disequilibrium to equilibrium. Despite all these changes, Singapore managed to increase its exports of goods and services.
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5(a)[2]
Identify two benefits of a decrease in a country’s population size. Two from:
may be fewer dependentsless pressure on resourcesless food neededmove population towards the optimum level / reduce overpopulationreduce overcrowding / more land spacereduce pollution / less negative externalitieslower importslower government expenditure (on healthcare/education)less unemployment / less unemployment benefitmay increase GDP per head.5(b)[4]
Explain how a market moves from disequilibrium to equilibrium. Logical explanation which might include: If demand is greater than supply / there is a shortage / excess demand (1)
price will rise (1). If supply is greater than demand / there is a surplus / excess supply (1)
price will fall (1). Demand will again equal supply / demand would not initially have been equal to supply (1). 4 One mark for reference to a change in price. Maximum of 2 marks for diagrams which show initial disequilibrium and change in price which restores equilibrium.
5(c)[6]
Analyse, using a production possibility curve (PPC) diagram, the effect of a decrease in the size of a country’s labour force on its economy. Up to 4 marks for the diagram: Axes correctly labelled with different outputs (1). Initial curve drawn as a curve/line sloping downward to the axes (1). New curve drawn as a curve/line sloping downward to the axes (1). Shift to the left indicated by arrow or letters (1). Up to 2 marks for coherent analysis which might include: A decrease in the size of the labour force reduces resources / factors of production available (1)
this lowers productive capacity / the maximum output that can be produced (1). Note to gain the marks for the curves, these must be drawn to the axes.
5(d)[8]
Discuss whether or not an increase in exports will benefit an economy. In assessing each answer, use the table opposite. Why it might:
may increase export revenue, improve the current account balancemay increase total demandmay increase investmentmay increase output / economic growthmay reduce unemploymentmay increase incomes. Why it might not:may cause demand-pull inflationopportunity cost of selling more products on the home marketmay lead to shortages on the home marketmay deplete resourcesmay push up the exchange rate, reversing the increase in exports in the long runmay make the economy more subject to external shocks. Level Description A reasoned discussion which accurately examines both sides of the economic argument, making use of economic information and clear and logical analysis to evaluate economic issues and situations. One side of the argument may have more depth than the other, but overall, both sided of the argument are considered and developed. There is thoughtful evaluation of economic concepts, terminology, information and/or data appropriate to the question. The discussion may also point out the possible uncertainties of alternative decisions and outcomes. 6–8 A reasoned discussion which makes use of economic information and clear analysis to evaluate economic issues and situations. The answer may lack some depth and development may be one-sided. There is relevant use of economic concepts, terminology, information and data appropriate to the question. 3–5 There is a simple attempt at using economic definitions and terminology. Some reference may be made to economic theory, with occasional understanding. 1–2 A mark of zero should be awarded for no creditable content.
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